A week before the case was scheduled to go to trial, investors in American Century mutual funds dropped a lawsuit over the fees the funds charge, Bloomberg reports. They had accused the company of charged retail customers more than institutional investors.
But during the litigation, the company reduced fees twice, reducing them by $7 million a year, said the attorney for the investors, Guy Burns. "We believe the fees are now reasonable," he said.
However, a spokesman for American Century said the fee reductions were unrelated to the lawsuit and were at the discretion of the funds' boards.
The investors may have decided to drop the case because two weeks ago, a judge ruled they could not present evidence about the fees American Century charges to pension funds and other institutional investors. The investors had argued that those fees go through competitive bidding, whereas the fees retail mutual funds charge do not.